Five tips for dealing with unpaid invoices
The weight of unpaid invoices can create challenging situations for businesses. As many have had to close due to the coronavirus pandemic many now face serious financial difficulties, which only makes the delay in payments worse for both small businesses, the self-employed and freelancers.
It has been reported that 1 in 4 businesses are likely to fall into insolvency as a result of late payments of invoices, according to The Forum of Private Business. With many industry sectors now reopening, as lockdown restrictions ease, many business owners will be worrying about paying suppliers, staff members, rent and bills. Any unpaid invoices only cause extra worry and can result in serious consequences. In this blog, we highlight five best practices of managing debt recovery and payment procedures in your business.
Clear payment terms
From the outset, your clients should know when they are expected to pay you.
It should be highlighted to your clients, in unambiguous terms, the work you will be doing for them, when that work will be completed, the cost and when you will be raising an invoice for the work. Once you have established a process, draft a document, and include it in your terms of work. Such a clearly drafted document can help to avoid disputes and delayed payments.
This process can also be featured on your website or in any initial consultations.
Invoice on time
This may seem like a standard task, but by raising your invoices quickly demonstrates to your clients that getting paid is important to you. Its also provides the client that you are invoicing with certainty – they are not left waiting for an unexpected invoice to appear. Be prompt when making an invoice, be clear, and ensure that your actions match that of your business terms.
Once you have sent your invoices off to the appropriate clients, set up reminders for when it falls due and check whether it has been paid. Should an invoice not be paid by the correct date, send the client a reminder email or letter. By following up on payments you are sending a clear message to your client that you take payment terms very seriously.
Establish a process for late payments
It is likely that at some point or another you will encounter late payments. It is important that you establish a clear process for dealing with late payments, which may even include the assistance of a debt recovery lawyer. You could look to include several steps to your process, starting with a simple phone call to establish why the payment is late and when you can be expected to be paid. Once you have your process established you can explain to your client that you have a standard escalation process, which may include charging interest.
Getting legal advice
In some cases, it may be necessary to instruct experts to manage the debt recovery process for you. A debt recovery solicitor will initially send a letter indicating that they have taken over managing the debt – in many cases, this is enough to prompt the debtor into paying.
Why choose GL Law?
We have an experienced team who can assist you with recovering both disputed and undisputed debts. We pride ourselves on exceptional customer care skills enabling you to send out the right message and retain the goodwill of your customers whilst recovering outstanding payments.
We can offer you clear, practical advice and will discuss all the options available to establish the most appropriate way of dealing with debtors. We have tried and tested processes in place to ensure we can recover undisputed debts quickly, efficiently, and cost-effectively, with transparent fixed fees.
We are proud to hold Lexcel Accreditation, issued by the Law Society. This involves the firm undergoing a rigorous audit process which ensures we maintain high levels of client care.
Contact our Commercial Dispute solicitors in Bristol or London
Let’s talk. You can call us on 0117 906 9400 or email firstname.lastname@example.org for further information from our Commercial Dispute solicitors in Bristol and London.